Two states that refused to settle the Microsoft Corp. antitrust case sought tougher penalties Monday, arguing that a deal negotiated with the Bush administration was inadequate to constrain the software company. Massachusetts and West Virginia urged a federal appeals court to instruct the trial judge to impose tougher sanctions than those included in a settlement the judge approved among Microsoft, the Justice Department and 17 other states.
IN A CASE that began nearly a decade ago, lawyers for the states said the settlement was profoundly flawed and “does not fulfill even the most basic mission of stopping all of the practices” committed by Microsoft.
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Courtroom arguments before the appellate judges were to begin in November.
“The district court’s remedy will not restore competition, deny Microsoft the fruits of its illegal conduct or otherwise satisfy this (appeals) court’s remedial objectives,” the states wrote.
Microsoft noted that its legal filings were due next month.
“The district court thoroughly reviewed these issues last year and issued comprehensive rulings that represent a fair resolution of this case,” spokesman Jim Desler said. “These rulings have been agreed to by the Department of Justice, virtually all the states that filed suit against Microsoft and only two states and a couple of competitor groups are pressing forward.”
The long-running court battle — the most significant antitrust case in a generation — culminated last November when U.S. District Judge Colleen Kollar-Kotelly accepted nearly all the settlement provisions. She rebuffed arguments by nine states and the District of Columbia that tougher sanctions were essential to restore competition in the computer industry.
All the states except Massachusetts and West Virginia eventually joined in the settlement, which gives Microsoft rivals more flexibility to offer competing software features on computers running its flagship Windows operating system.
“Microsoft has been found guilty of predatory practices yet allowed to continue to crush innovation, competition and consumer choice in the computer software industry. This conduct harms consumers and companies all over the country,” the Massachusetts attorney general, Tom Reilly, said in a statement Monday.
Two Washington-based industry groups, the Software and Information Industry Association and the Computer and Communications Industry Association, also appealed Kollar-Kotelley’s approval of the settlement. They said the deal included “wholly inadequate” provisions to curb Microsoft’s behavior; some of the trade groups’ members include Microsoft rivals.
“The court approved a consent decree that neither cures what had been done illegally in the past nor prevents illegal conduct in the future,” lawyers for the groups wrote Monday.
The two holdout states are carrying their fight to a U.S. appeals court that has handed Microsoft considerable victories. It overturned another judge’s order that Microsoft remove its Web browser software from Windows, and it threw out two of the government’s three antitrust claims against the software company. It also blocked a court-ordered breakup of Microsoft.
But the same appeals court also affirmed in June 2001 that Microsoft repeatedly, ruthlessly and illegally used its dominance in the software industry to protect its Windows monopoly from competition. And it has already indicated that the entire court will rule on this latest fight, rather than the traditional panel of three judges.
The appeals court also has indicated previously that it recognizes the importance of moving quickly in an antitrust case tied so closely to fast-moving technology.
“Six years seems like an eternity in the computer industry,” the court said in its last antitrust ruling on Microsoft — nearly two years ago.
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